MEMORANDUM FROM: MARTIN BLACK, CITY ADMINISTRATOR DATE: DECEMBER 3, Background:
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1 MEMORANDUM TO: MAYOR AND CITY COUNCIL FROM: MARTIN BLACK, CITY ADMINISTRATOR RE: EMPLOYEE PAID TIME OFF BENEFIT AND PERSONNEL POLICY CHANGES DATE: DECEMBER 3, 2012 Background: The City has historically utilized a traditional approach to personnel benefits for time off that includes different accruals and eligibility for sick, vacation and other paid time off. Looking to limit future accrued liability for the City and provide greater flexibility in the future for employees, I am proposing changes to employee benefits going forward that are intended to meet several objectives. Moving to a single paid-time off (PTO) accrual system has several advantages that have been documented by other organizations utilizing this approach and include: Providing more flexibility for employees Reducing unscheduled absenteeism Staying competitive with the market Reducing administrative burdens Cost savings/reduced benefit liability costs In a study conducted by the World at Work Association in 2010, the average number of PTO days offered by employers was: Less than one year of service: 15 days 1-2 years of service: 19 days 3-4 years of service: 20 days 5-6 years of service: 23 days 7-8 years of service: 23 days 9-10 years of service: 24 days years of service: 26 days years of service: 28 days 20+ years of service: 29 days In addition, employees are typically permitted to bank between eighty (80) hours up to one half of their eligible accrual in to the next fiscal year or lose the paid time off. This provision is intended to ensure a balance between work and personal time for employees and provides a means for the employer to respond to the financial impacts of employee terminations in service.
2 Currently the City provides personal, vacation and sick time to employees at the following annual rates: Personal Day: 8 hours annually Vacation Time: Beginning with Ending with 0 years 3 years: 80 hours per year 4 years 9 years: 120 hours per year 10 years 19 years: 160 hours per year 20 years and over: 200 hours per year Maximum vacation accrual is the employee s annual accrual rate plus eighty (80) hours. Sick Time: 3.70 hours per pay period (96.2 hours annually). Effectively, employees can earn a combined rate of overall paid time off beginning at 184 hours in their first year of service, increasing to 304 hours after twenty (20) years of service. The proposed changes to a unified paid-time off (PTO) accrual are designed to improve administration, reduce future City liabilities and provide employees with additional flexibility in the use of leave time. The proposed new PTO accruals and limits on carryover will also reduce liabilities of banked leave time while encouraging employees to use leave appropriately. Reductions to initial year accruals reflect approximately one week of leave (40 hours) with an across the board reduction to limit carry over to no more than eighty (80) hours of leave. Existing policy provides accrual and pay out of up to one half (50%) of earned sick leave subject to a maximum of 1920 hours. In addition to proposed leave accrual changes, several provisions related to rehiring, process to amend these procedures going forward, deletion of paid time off for voting to reflect changes in availability of early voting and absentee voting provisions, and related amendments have been developed. Further changes will be developed and presented for your consideration after we bring on the Human Resources Compliance Officer. The proposed changes in accrual rates and carry-over limitations (proposed to be set as 80 hours annually) are intended to dramatically reduce future pay-outs at termination so that fiscal year budget impacts can be more easily absorbed. The proposed change in policy also sends a clear message that we value work-personal life balance and expect employees to take the opportunity to be away from work to re-energize, spend time with family or enjoy those opportunities as they see appropriate. By making the changes prospective, accrued benefits to existing employees will not be impacted and overall organizational disruption can be minimized. 2
3 Proposed Draft Changes: The following specific draft changes and additions to the Personnel Policies and Procedures Manual are proposed for your consideration and are presented in strike through and add format: Section Manual Amendment and Revision (a) The "Personnel Policies and Procedures Manual" may be amended or revised as necessary in order to ensure the effective administration and equitable application of these rules and regulations. Proposals for amendments or revisions shall be submitted to the Director of Human ResourcesCity Administrator or designee. Appropriate changes will be adopted in resolution form after review by the City Administrator, City Aattorney, notice to City staff, and Employee Relations Committee, andstaff and approval by the Governing Body. Sec Appointment And Rehire (a) The minimum rate of pay for a range shall normally be paid to each new employee or rehire. Appointment rates above the minimum, but not in excess of the maximum rate, may be paid if the department head director and City Administrator deem it to be in the best interest of the City. (b) A former City employee who has left City service in good standing may be rehired for any available position for which he/she is qualified upon recommendation by the department director and approval by the City Administrator. Under most circumstances, a former City employee must participate in a recruitment process to acquire the desired position. (This applies to full-time, regular part-time, and seasonal part-time employees.) (c) Former full-time or regular part-time employees who are rehired within one (1) year of their separation from City service to the same position that they previously held with the City, will be paid at the same rate they held when they left City service. If this rate would place them below the starting range for the current comparable range, they will be paid at the entry level rate. (d) Former seasonal part-time employees who are rehired to the same position will be paid in accordance with Division 13 of this document. Sec Personal Leave Day: Full time employees hired prior to January 1, 2013 and who maintain continuous employment with the City are subject to and entitled to these policies. All full time employees hired on or after January 1, 2013 are subject to and entitled to policies as provided under Sec.5-123, Paid- Time-Off. 3
4 Sec Sick Leave: Full time employees hired prior to January 1, 2013 and who maintain continuous employment with the City are subject to and entitled to these policies. All full time employees hired on or after January 1, 2013 are subject to and entitled to policies as provided under Sec.5-123, Paid- Time-Off. Sec Vacation Leave: Full time employees hired prior to January 1, 2013 and who maintain continuous employment with the City are subject to and entitled to these policies. All full time employees hired on or after January 1, 2013 are subject to and entitled to policies as provided under Sec.5-123, Paid- Time-Off. Sec Personal-Time-Off Voting Leave Full time employees hired prior to January 1, 2013 and who maintain continuous employment with the City are subject to and entitled to leave policies as provided under Sections , 121 and 122. All full time employees hired or rehired on or after January 1, 2013 are subject to and entitled to the policies as provided below: (a) Employees entitled to vote will be granted one (1) hour, exclusive of authorized breaks, for the performance of their voting obligation, provided they actually cast their vote. This approved time off will be scheduled with the supervisor. (b) This section will not apply to an employee who has three (3) or more consecutive nonworking hours during the times that the polls are open. For all full time employees hired or rehired after January 1, 2013, the City provides a general leave policy of paid-time-off (PTO). PTO shall be accrued by full-time employees to use for vacation, personal time, personal illness or time off to care for dependents, or for any other valid absence as determined by the employee s department director. (a) PTO Accrual Rate and Process. Full time employees shall accrue the following amount of PTO biweekly on the basis of a forty (40) hour work week: Beginning with Ending with 0 years 2 years: 144 hours per year 3 years 5 years: 160 hours per year 6 years 10 years: 176 hours per year 11 years 15 years: 192 hours per year 16 years 19 years: 208 hours per year 20 years and over: 224 hours per year (b) PTO Accrual During Absence. Employees do not accrue PTO after two weeks of absence from the job, or during any time during which Short Term Disability or Worker s Compensation is being paid to the employee. 4
5 (c) Eligibility for PTO. Employees shall accrue PTO hours immediately upon employment, however, an employee may not use these hours until after three full months of employment, and as approved by the department director. In the event that an employee must be off the job but is not eligible for or does not have a sufficient amount of PTO time available, they may submit a leave request for leave without pay. The approval or non-approval of such request will be determined by the employee s department director. (d) Computing Scheduled or Unscheduled General Leave. Any absence for a fraction or part of a day shall be charged in increments of not less than one half (1/2) hour. (e) Scheduling of PTO. PTO shall be distinguished between scheduled and unscheduled time off. (1) Scheduled PTO: a. The scheduling of time off shall be at the discretion of the department director based upon operational considerations. Every effort will be made to accommodate the employee s requested dates for PTO. b. Scheduled leave should be submitted to the department director no later than three (3) days in advance of the requested leave unless otherwise directed by the employee s department director. The department director shall have the option of denying or rescheduling the leave to another date and/or time based upon operational considerations. c. Scheduled PTO must have the prior approval of the employee s department director. (2) Unscheduled PTO. In the event the employee is unable to work due to unforeseen personal illness or injury, or for other unforeseen reasons, the following provisions shall apply: a. If an employee is unable to report to work for any reason, they shall communicate this fact to their department director in accordance with departmental rules and regulations. Such notification shall be made each time a scheduled work shift shall be missed unless authorization has been granted by the department director covering a prolonged absence of specified duration. Unless an employee can show good cause, failing to comply with this provision shall be considered an unscheduled absence without pay. Absences not reported in accordance with these provisions shall be subject to disciplinary action. b. The employee may be required to furnish medical verification or other proof that unscheduled use of PTO was unavoidable to their department director. 5
6 c. The unscheduled use of PTO which is considered to be excessive by the department director shall be investigated and the employee may be subject to disciplinary action. Department directors will document the reasons for initiating an investigation and the conclusion of their investigation. d. The unscheduled use of PTO on two (2) or more occasions within a payroll year shall void an employee s ability to receive a salary adjustment increase throughout the year. Circumstances related to the use of unscheduled PTO will be evaluated by the department director. If just cause can be shown and presented to the City Administrator, an increase may be considered. All consecutive work day absences due to the same illness shall be considered as one occasion for the purpose of this policy. g. Each employee may carry 80 hours of accrued PTO over into a new fiscal year. Employees are responsible for monitoring and taking their PTO over the course of a year so that they do not lose time accrued when the current fiscal year ends. If extenuating circumstances prevented the employee from taking scheduled PTO, this PTO may be carried over and taken in the first half of the next fiscal year with the approval of the department director and City Administrator. h. Employees are paid for the PTO they have accrued at employment end. If an employee has used PTO time not yet accrued, and employment terminates, the PTO taken is deducted from the final paycheck. Employees who give two (2) weeks or less prior notice of employment termination must work the notice of termination period without utilizing PTO. Sec Wage Increases {Part-time and Seasonal} (a) All regular part-time employees may receive wage increases effective July 1 each year provided that they have been employed with the City since, at least, July 1 of the previous year. The amount of the wage increase will be determined by the City Administrator annually and approved by the Governing Body as part of the budget process. (b) All Sseasonal part-time employees may receive wage increases effective at the beginning of the next assignment period if they had satisfactory performance in their previous assignment period. Wage increases, however, will not occur more frequently than every twelve (12) calendar months. (Seasonal part-time employees who start a new assignment less than twelve (12) calendar months after receiving a wage increase may be eligible for an increase during the new assignment period if they reach the twelfth month during that assignment.) The amount of the wage increase will be upon recommendation of the department director and as determined by the City Administrator annually and approved by the Governing Body as part of the budget process. 6
7 (c) Some part-time positions are required to acquire specific certifications prior to obtaining a wage increase. Next Steps: These proposed changes are presented for Mayor and City Council conceptual consideration and comment at this time. After the December workshop, final edits and reviews will be completed (including City Attorney review) prior to scheduling the necessary resolutions for Governing Body approval. Additional modifications to the Personnel Policies and Procedures Manual are anticipated and will likewise be presented in draft conceptual format prior to scheduling formal approval by the Governing Body. 7
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